ComScore and Rentrak Merge, Creating Leading Cross-Platform Measurement Company

What: Internet analytics company ComScore has acquired film and TV viewership tracker Rentrak Corp., a move to diversify its media tracking business.Why it matters: The combined company is expected to have total synergies of at least US$20 million in 2016 and at least US$35 million in 2017.The merger paves way for new cross-platform ratings currency and expands choice for television and advertising industries beyond Nielsen and other providers.

comScore, Inc. and Rentrak Corporation have announced that the companies have entered into a definitive merger agreement under which the companies will combine in a stock-for-stock merger. Rentrak has offices in North America, Europe, Asia and Australia, including in Mexico, Brazil and Argentina.

Pursuant to the terms of the merger, which has been approved by the Boards of Directors of both companies, film TV viewership tracker Rentrak will merge into a wholly-owned subsidiary of comScore, and each share of Rentrak will be converted into the right to receive 1.15 shares of comScore.

The combined company is expected to have total synergies of at least US$20 million in 2016 and at least US$35 million in 2017. The company also anticipates a significant portion of the synergies to be revenue related which it expects to grow over time with an attractive contribution margin.

The transaction is subject to shareholder approval of both companies, along with customary regulatory closing conditions, and is expected to be completed by early 2016.

Combined Company Management Team and Governance

comScore’s current Chief Executive Officer, Serge Matta, will lead the combined company as CEO.

Mel Wesley will continue as the Chief Financial Officer, and David Chemerow, Rentrak’s current COO & CFO, will serve as a strategic advisor to the CEO, focused on the successful integration of the two companies.

The new company will also draw upon the collective talent at both companies to harness the experience and expertise of each organization to redefine the future of measurement. The combined company’s board will consist of twelve directors – eight from comScore and four from Rentrak.

Strategic Rationale

By combining comScore and Rentrak’s products, talent and significant information assets, the new company will provide even more robust measurement solutions to the media and advertising industries, following the consumer whenever and wherever content is consumed.

The combination will enable the company to introduce a more comprehensive and precise set of solutions for measuring media consumption and advertising across platforms, setting the standard for the next generation of cross-platform measurement solutions. Together, comScore’s industry-leading digital audience and advertising solutions, combined with Rentrak’s census-based worldwide movie and video-on-demand measurement, and its massive and passive TV measurement offerings, will provide a more complete picture of the way people consume media today and in the future. The combined organization is expected to possess a unique breadth of knowledge, experience, expertise, and skill sets that cannot be duplicated, dramatically enhancing the range of capabilities and offerings for clients and the industry.

“Together we have an even more powerful ability to deliver what our clients and the media industry have long been asking for: a comprehensive cross-platform measurement currency that accounts for all the ways in which content is consumed, whether that happens on a desktop, mobile device, live or time-shifted TV, video on demand or through over-the-top devices,” said Matta.

“With the advent of digital technology, the time has come to offer the cross-platform measurement systems of the future: through which content owners will ultimately be able to quantify their entire audience, and agencies will have access to the cross-platform metrics needed to effectively plan and execute campaigns,” Matta added. “This merger also recognizes the critical importance of combining digital and TV assets for next generation media measurement, which requires a higher degree of precision at both a national and local market level.”

The merger proves media companies are looking for ways to measure their audiences more precisely as consumers are increasingly shifting to DVRs, online streaming services and smartphones to watch their shows. The old ways of tracking viewers and listeners are proving inadequate and the audience tracking industry has been scrambling to offer what they say are more effective tools.

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